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    Rates Crash as FAAC Inflows Boost Liquidity in Banking System

    Julius AlagbeBy Updated:No Comments2 Mins Read
    Rates Crash as FAAC Inflows Boost Liquidity in Banking System

    Rates Crash as FAAC Inflows Boost Liquidity in Banking System

    The short-term interest rates benchmark crashed as federal allocations and coupon payments boosted the liquidity level in the banking system. The market ended the trading session at N831 billion as a sequence of inflows shifted the money market liquidity condition.

    Money market data showed that the banking system’s N349.20 deficit was upturned due to FAAC inflows and coupon payments, causing the financial system liquidity to improve significantly by N1.18 trillion.

    Market reports obatined highlight that the banking system opened with credit of N773.22 billion. Interbank rates (NIBOR) declined across all tenors, reflecting enhanced liquidity in the banking system.

    In tandem, money market rates also moderated, with the Open Buy Back (OPR) rate falling by 475 basis points to 26.50% and the overnight lending rate easing by 467 basis points to 27.00%.

    Barring any anticipated funding activities, analysts said they expect rates to remain around the similar level. The Nigerian Treasury Bills (NITTY) curve witnessed yield declines across most maturities.

    Nonetheless, activity in the secondary market remained subdued, with the average yield inching down by 4 basis points to 17.67%. Rates Crash as FAAC Inflows Boost Liquidity in Banking System Access Holdings Inches Near 52-Week High on Huge Trading Volume

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    Julius Alagbe is a senior financial journalist and Editor at MarketForces Africa with nearly two decades of experience in finance, accounting, and economics reporting.He is one of Nigeria's most prolific financial market reporters, covering capital markets, monetary policy, corporate earnings, banking, telecoms, and macroeconomic developments across Africa.Julius has built a strong footprint reporting on Nigeria's leading corporates and financial services sector, including coverage of the Nigerian Exchange Group, Central Bank of Nigeria monetary operations, MTN Nigeria, GTCO, and major investment banking transactions.He regularly monitors the CBN’s open market operations, interbank FX markets, and equity market movements, providing readers with real-time intelligence on Nigeria’s financial landscape.His reporting draws on direct access to institutional research from firms including Moody’s Ratings, CardinalStone Securities, Fitch, and other leading African investment houses.Julius brings analytical depth and editorial rigour to every story, making complex financial data accessible to professionals, investors, and policymakers across Africa.Julius Alagbe is based in Lagos, Nigeria.

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